Working for Families Tax Credits in New Zealand — The Complete Guide

Working for Families is not one payment. It is a set of tax credits that reach families through different channels and under different rules, and it is the main way the tax system supports households with dependent children. Most of the attention goes to the family tax credit, but a family's entitlement is worked out across the whole set.

Two features of the scheme are easy to miss. The first is that entitlement is tested on family income, so the amount a family receives can change as earnings change. The second is that the in-work tax credit has been increased on a temporary basis, and that increase is due to end on 31 March 2027.

This guide sets out the payments, how the income test works, and what happens when the temporary boost runs out.

How We Researched This Guide

The figures here are taken from Inland Revenue's own Working for Families pages: the family tax credit page, the in-work tax credit page, and the department's page on the in-work tax credit increase. Rates for the 2026-27 year are those set by the Income Tax (Tax Credit) Order 2025.

That order was made on 17 November 2025 and applies for the 2026-27 tax year and later. The family tax credit, Best Start, and Minimum Family Tax Credit thresholds are inflation-adjusted, and a cumulative increase in the Consumer Price Index of 5.27 per cent from 1 October 2023 to 30 September 2025 triggered this round.

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The Quick Summary (60-Second Version)

The short version, before the detail.

  • The family tax credit is the main payment: $7,921 a year for the eldest child and $6,454 per year for each other child.
  • Those amounts are paid at $152.00 and $123.00 a week from 1 April 2026.
  • The full family tax credit applies up to $44,900 of family income, then abates at 27.5 per cent.
  • The in-work tax credit has been temporarily increased to $147 a week and $7,670 a year until 31 March 2027.
  • The Minimum Family Tax Credit tops a family up to $36,604 a year after tax, or $703 a week.
  • Best Start also increased, from $3,838 to $4,041 a year from 1 April 2026.

The Four Payments, and What Each One Does

Working for Families consists of four credits, each with different jobs.

Payment What it is for
Family tax credit The main payment for families with dependent children
In-work tax credit A payment for families normally in paid work
Minimum family tax credit Tops up a working family's income after tax up to a set floor
Best Start tax credit A separate payment that also increased from 1 April 2026

The family tax credit does most of the work. At its full rate, it pays $7,921 a year for the eldest child and $6,454 a year for eacof the h othechildrenld, which, from 1 April 2026, is $152.00 and $123.00 a week, respectively. A family with two children at the full rate receives both amounts.

The in-work tax credit sits alongside it and is aimed at families who are normally in paid work. The Minimum Family Tax Credit is different in kind — rather than adding a payment, it lifts a working family's after-tax income to a floor. Best Start is a separate credit that also rose from 1 April 2026.

The Family Tax Credit and the Income Test

The full family tax credit is not paid to everyone. It is available in full when family income is $44,900 or less, and it is reduced above that threshold.

The calculation is stated plainly. Start with family income, subtract $44,900, and multiply the difference by 27.5 per cent. The entitlement for the year is the full family tax credit less that abatement. If the abatement is equal to or larger than the full family tax credit, there is no entitlement.

Take a family income of $100,000. Subtracting $44,900 leaves $55,100, and multiplying that by 27.5 per cent gives an abatement of $15,152.50. Because that abatement is larger than the family tax credit for a single child, there is no family tax credit entitlement — and where the abatement is larger than the family tax credit, the remaining abatement is deducted from any in-work tax credit.

That last step is the part people miss. The abatement does not stop at the family tax credit. It continues into the in-work tax credit, which is why a higher-income family can find both payments reduced by the same calculation.

The In-Work Tax Credit and the Temporary Boost

The in-work tax credit is a payment for families with working adults, and it has been temporarily increased. The increase runs from 1 April 2026 to 31 March 2027, or until the price of 91 petrol falls below $3 per litre for four consecutive weeks, whichever occurs first.

In-work tax credit Before the increase While the increase applies
Maximum weekly amount $97 $147
Maximum yearly amount $5,070 $7,670

The increased amounts apply to families entitled to the full amount with one, two or three children. Each additional child beyond three adds $15.00 a week. After 31 March 2027, the maximum returns to $97 a week and $5,070 a year.

If you were already receiving the in-work tax credit, the increase is automatic, and no action is required. Payments with the increase began on 7 April for weekly payments and 14 April for fortnightly payments.

Two conditions are worth knowing. In-work tax credit payments continue for up to 2 weeks during an unpaid break from work, such as changing jobs, leaving employment, or unpaid school holidays. They stop if you or your partner start receiving a main benefit or a student allowance.

Working for Families Tax Credit in New Zealand — The Complete Guide

The credit is also subject to the same 27.5 per cent abatement above $44,900 of family income. That means the temporary increase and the abatement work against each other at higher incomes, so the extra amount a family actually keeps is smaller than the headline change suggests.

The Minimum Family Tax Credit

The Minimum Family Tax Credit works differently from the others. Rather than adding a payment to a family's income, it tops that income up to a floor: at least $36,604 a year after tax, which is $703 a week after tax.

It comes with a work requirement. At least one parent must be working the required hours for salary or wages — a single parent at least 20 hours a week, or, in a two-parent family, one or both parents working at least 30 hours a week between them.

Because it is a top-up, the credit is most useful to a family whose income from work is steady but low. It does not replace the other credits; it sits under them, ensuring that a family working the required hours is not left below the floor.

Best Start, and Who Cannot Receive the Family Tax Credit

Best Start is the fourth payment, and its rate increased from $3,838 to $4,041 a year from 1 April 2026. It exists alongside the other credits as an entitlement in its own right.

There is also a group of families for whom the family tax credit may not be available. That includes families receiving a Foster Care Allowance, an Orphans' Benefit, an Unsupported Child's Benefit, an Oranga Tamariki parent's allowance or board payments. Where a family is receiving a benefit, Work and Income can pay the family tax credit.

The list is narrow on purpose. It reflects situations where a child's care is already covered by another payment, rather than assuming that a family receiving support should not also receive this credit.

Questions You Might Have

What income is the family tax credit tested against?

Family income. Full credit applies up to $44,900; above that, the entitlement is reduced by 27.5 per cent of the amount over the threshold.

When does the in-work tax credit increase end?

On 31 March 2027, or earlier if the price of 91 petrol is below $3 a litre for four consecutive weeks. After that, the maximum returns to $97 a week and $5,070 a year.

Do I need to apply for the in-work tax credit increase?

No. If you were already receiving the in-work tax credit, the increase is automatic. Payments with the increase began on 7 April for weekly payments and 14 April for fortnightly payments.

Does a break from work stop my payments?

Not immediately. In-work tax credit payments continue for up to 2 weeks during an unpaid break from work, such as changing jobs, leaving employment, or unpaid school holidays. They stop if you or your partner start receiving a main benefit or a student allowance.

What does the Minimum Family Tax Credit require?

A floor of $36,604 a year after tax, or $703 a week after tax, and a minimum level of work. A single parent must work at least 20 hours a week for salary or wages, or, in a two-parent family, one or both parents must work at least 30 hours a week between them.

What Matters Most

Working for Families is a set of credits rather than a single benefit, and the family tax credit is only the largest of them. Two things determine what a family actually receives: the number of children, which sets the full amount, and family income, which abates it at 27.5 per cent above $44,900. The abatement also carries over to the in-work tax credit, so the two move together.

The temporary increase to the in-work tax credit is the feature most likely to be forgotten, because it is temporary by design. It runs from 1 April 2026 to 31 March 2027, or until the price of 91 petrol is below $3 a litre for four consecutive weeks, whichever comes first. After 31 March 2027, the maximum returns to $97 a week and $5,070 a year — a real reduction rather than a technicality.